Important Things to Keep in Mind When Opening a Checking Account
Whenever you open a bank account, it’s important to ask questions and take advantage of all of the material provided by the bank. Often, certain terms of the account can go unseen by consumers, which can cause confusion down the road. With this in mind, here are some questions to ask yourself if you’re planning on opening a checking account.
What exactly is a checking account, and how is it different from any other bank account?
The purpose of a checking account is for customers to be able to both deposit and withdraw cash and checks with ease. Although you can withdraw money, with any type of savings account that you open, the idea is to allow the money to accumulate so that your bank carrier will pay you interest on the money you deposit.
What are you going to be using your account for?
This may seem like a silly question to ask because it has a seemingly obvious answer. But for some consumers who are unfamiliar with the different types of accounts, it’s actually not. A checking account is ideal as a repository for the money you use for paying bills and making day-to-day transactions. It’s the best vehicle for actually using and spending your money, whereas a savings account is ideal for putting money away.
What other considerations should you bear in mind?
Among the important things that consumers can often overlook when opening a checking account are the interest rate and fees. Some important fees to keep in mind include:
- ATM withdrawal fees — The bank at which you open a checking account will have a certain number of branches set up with ATMs available, which you can use to withdraw and deposit money. In the event that you are not able to access one or your bank’s ATMs, you will be charged an ATM withdrawal fee — sometimes as much as $2-$3.
- Account Minimum Fees — Most banks charge a monthly fee when a checking account’s balance falls below a certain minimum amount. In some cases, that fee can be waived if you quickly bring the balance above the minimum. These account minimum fees often range from $5-$15.
- Overdraft Fees — If you go to the store or have your monthly bills set up on automatic payment but run out of money in your account, your bank will lend you money in place of paying for those transactions (unless you opt out). The amount they pay in your place will appear as a negative transaction on your account history. If the negative balance persists without being paid, the bank will charge an overdraft fee for each day it continues. Some banks wait 4-5 days before charging fees, which can range from a $35 one-time fee to a weekly fee of $5-$40.
- Card Replacement Fee — If you misplace your debit or ATM card or it becomes stolen, the bank will replace the missing card, often at a cost ranging from $5-$25.
There are a variety of other considerations not listed here that can be found in each bank’s contract when opening a checking account. If there are terms or conditions that seem unfamiliar to you, consult a representative of the bank for a detailed explanation.
Remember to think of how much money you’re depositing and how much money you will be spending. What are some daily and monthly payments you make that would be made easier with a checking account? To learn more about checking accounts and how they can benefit you, contact CNB today